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STAFF CONTRIBUTORS

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Michael Fletcher writes about the national economy for the Post, where he has been a reporter since 1995. Previously, he was a White House correspondent and he also has covered national education policy, race relations and the District government. Prior to coming to The Post, he spent 13 years as a reporter at The Baltimore Sun. Fletcher is co-author of "Supreme Discomfort: The Divided Soul of Clarence Thomas," published by Doubleday in 2007. Born and raised in New York City, Fletcher is a graduate of Brooklyn Technical High School and Boston University.

Ariana Eunjung Cha writes about the economy for the Post and is the Web editor for its national economy and business section. She has served as the paper's bureau chief in Beijing, Shanghai and San Francisco and as a correspondent in Baghdad.

Brady Dennis writes about economic policy and financial regulation. Before coming to The Post in September 2008, he was a staff writer at the St. Petersburg Times in Florida. At the Post, he was a finalist for both the Pulitzer Prize and a Gerald Loeb Award for a three-part series he and a colleague wrote about the rise and fall of American International Group.

Zachary Goldfarb has covered the U.S. financial crisis for The Post for more than three years. Originally from Manhattan, he is a graduate of the Princeton University and now lives in Washington, D.C. He enjoys vegetarian cooking, is getting started as a cyclist and spends too much time obsessing over gadgets.

Jia Lynn Yang is a staff writer at The Washington Post who covers policy that affects corporate America. She's interested in taxes, regulation and all the ways that business and Washington try to influence and make sense of one another. Before joining The Post, Jia Lynn was a Washington correspondent for Fortune magazine.

Neil Irwin writes about the U.S. economy and the Federal Reserve. He has been at the Post since 2000 and has an MBA from Columbia Business School, where he was a Knight-Bagehot Fellow in Economics and Business Journalism. His interests include bond market data, cured pork products, and pinot noir.

Lori Montgomery writes about national economic policy emanating from the White House and Capitol Hill. A former foreign correspondent who traveled Europe pre-euro, she also covered domestic politics in such disparate locales as Dallas and Detroit. She has three kids, one dog and no time for your so-called "interests."

Ylan Q. Mui covers the consumer economy and has been a member of the Financial staff since 2005 and a staff writer since 2002. She is also an adjunct journalism instructor at the University of Maryland. Ylan graduated from Loyola University in New Orleans, where she was born and raised.

Howard Schneider covers international economics and trade for the Post. He has served in a variety of roles at the paper, three tours abroad in Israel, Egypt and Canada, and as economics editor. He is a native of Maryland's Eastern Shore, and proudly includes a chief oyster inspector among his ancestors.

Mike Shepard is the Night Editor for Economy and Business News. A graduate of Georgetown University, Mike has worked at the Post for 22 years in a variety of editing assignments. He spent 1997 teaching journalism in Brazil on a Fulbright scholarship and is a fluent speaker of Portuguese.

Political Economy explores how political forces in Washington and elsewhere in the world shape the economy and how corporate agendas influence political institutions and politicians. The blog offers new perspectives on the day's top economic and business stories with exclusive interviews with government officials and lawmakers, commentary from influential economists and analysis from Post reporters. Ariana Eunjung Cha is the blog's lead writer and Mike Shepard is the author of the daily economic agenda.

"Now that we're all used to pre-nups, it's time to start thinking about divorce insurance: Ever had that sinking feeling that the person your friend is marrying is perfectly awful? Of course not, because you love everyone. But should it happen, you now can give the perfect wedding present: divorce insurance."

Financial deregulation: too soon or just around the corner?

By
Jia Lynn Yang

By Jia Lynn Yang
As my fellow Political Economy denizen Brady Dennis makes clear in this story, it's highly unlikely that Republicans -- if they win big tomorrow -- will be able to repeal Dodd-Frank financial overhaul law altogether. Even just killing off portions, such as the Consumer Financial Protection Agency or the derivatives portion of the bill, would be tough to pull off, too.

But there are changes in the margins that Republicans could still push forward that would benefit Wall Street.

One example: curtailing the independence of the consumer protection agency, according to Jaret Seiberg, senior vice president covering financial services policy at the Washington Research Group.

A Republican majority could try to force the new agency to be run by a board of directors, which would include some bank regulators, much like the Federal Deposit Insurance Corporation, Seiberg suggested.

"Putting in a better system of checks and balances would reassure the markets and reassure the banks that they're not going to deal with overreaching," he said.

Seiberg also thinks that the pendulum could already start swinging back toward deregulation, and a Republican takeover of the House would accelerate this.

Think that's too soon, given that Dodd-Frank is only in the earliest stages of implementation? Seiberg points to what happened soon after the banking crises of the late 1980s and early 1990s. Despite passing a slew of laws that imposed tough capital rules on thrifts and creating the Office of Thrift Supervision, by 1992, Congress had begun easing up on banks. The Housing and Community Development Act of 1992 made changes that pared back some prior rules. Then by 1999, Congress passed the Gramm-Leach-Bliley Act, a landmark bill that allowed banks to conduct investment banking, commercial banking and insurance all under one roof.

This latest era of regulation has included Sarbanes-Oxley, new credit card regulations and Dodd-Frank. "The climate is ripe in 2011 for the start of deregulation," Seiberg wrote in a recent note. He predicts that bold legislation is possible within five to 10 years.

It may be good for Wall Street bonuses, but it would be terrible for investors and consumers.

There is one major situation building that would demonstrate once more that Wall Street needs to be seriously regulated. That is the foreclosure crisis. It was caused by Wall Street ignoring hundreds of years of state and local law on land and mortgage recordation. They wanted to get bigger bonuses, to be able to rapidly trade the securitized sliced/diced mortgages, and to hide the identities of predatory lenders.

They set up an illegal system called "MERS" to record mortgages in competition with the legal systems. When foreclosures came into the picture, they needed the paperwork from the legal system of records and it didn't exist. So they fraudulently forged the paperwork and lied about it.

I strongly suspect some bank CEO's and lawyers are going to wind up in jail over the fraud and perjury that they committed or ordered.

Someone should tell the Ivy-League economists in other media with their endless prattle to take a hike, haven't they miss-informed the public enough with their wrong theories (which don't work anyway - as the past two years have proven already)? Their suggestions about more stimulus spending are the equivalent of inflating all the onboard life-jackets and tying them together to try to keep the Titanic afloat after it has hit the iceberg - their curves with their disproportionate scales don't account for size or volume so they have no sense of size or volume. lol.

The only other mathematician on this continent intellectually capable of cross-checking my math (who just happens to be my father - luckily I am visiting him right now) just cross-checked my math and confirmed my results - the U.S. government accounts for such a small portion of the U.S. economy that increasing government spending hardly makes a dent in an economic downturn. America isn't some Third World country or China where the government is the largest part of the economy, where the government can increase economic activity just by increasing spending. lol.

The problems of the U.S. economy and the multiple competing global systems that form the U.S. economy are serious, and will require the best mathematical minds in the world to sit down with the leaders of a business-oriented congress (lets see if we get one Tuesday) to fix it, eight words - no business means no jobs and no recovery.

Somewhere, someplace, there may be some magical land where magical regulations prohibit and prevent unwise extensions of credit to all of those who won’t be able to repay their loans, and still allows credit to be extended to all of those who will use it wisely and successfully to promote new businesses, increase employment, increase productivity and growth, and contribute to greater prosperity for all of us, all the while those magical regulations will protect all of us from the vicissitudes of the market and a vacillating and unpredictable government which is constantly adjusting its monetary and fiscal policy to the undulations of public opinion as driven by the demagogy of the day, but I doubt it. And, it is a little disconcerting that they are either so foolish or arrogant as to keep trying, but I suppose it is a job at least.

Consumers need to take hold of the power in banking. Banks used to serve the people, now the people serve them. If the CFPB gets the funding and starts to build an online community for consumers...how long is it going to take? 1 year? 2 years? The party fighting and infighting is going to slow its progress immensely... solution- SpotBanks.com

It should be pretty obvious that deregulation (as presently conceived) will not work in this country! Until Corporate America figures out that running a business, let alone a government, should not entail following Voltaire's philosophy on statistics, it won't happen!

The economy is the perfect example that "If you don't cheat, you're not trying..." doesn't really work. If you want less regulation, then you need to prove you can do the right thing without having someone breathe down your neck!!!

PS: For those who think that ignorance is bliss, here's what Voltaire said...

"Statistics are like lies, they'll say anything you want."

PPS: The idea is to achieve genuine results, not to skew them by cutting staffs, employee working hours & "paring" expenses! It doesn't take a MBA to figure that one out!! It goes to show what happens when you let the accountants make the calls instead of exercizing true leadership!!!